The regulator also obliged the Quick Purchase to pay redress totaling more than £200,000 to 11 of its affected customers with each offered a new assured short-hold tenancy at an affordable market rent fixed for three years.
Steven James Martin, director at Quick Purchase and its only shareholder was censured for failing to exercise due skill, care and diligence in managing the firm.
From 14 July 2010 to 17 May 2011 Quick Purchase entered into 14 regulated SRB transactions, with customers without checking each deal was ‘appropriate and affordable’ for those customers.
Of the 14 SRB transactions, 11 were either inappropriate, unaffordable or both. The FCA regards these inappropriate and/or unaffordable sales as serious because they led to significant consumer detriment causing customers potentially to forgo between 29-38% of the equity in their homes.
Martin breached Statement of Principle 6, in managing the business of Quick Purchase in that it did not treat customers fairly, confirmed the FCA.
Quick Purchase failed to keep records to show why these transactions were affordable. Quick Purchase also breached MCOB rules in that it failed to ensure in all cases that valuations for the purposes of the SRB transactions were carried out by a valuer owing a duty of care to the customer.
Quick Purchase describes itself as a specialist SRB buying company, enabling homeowners to sell homes at a discount, but stay in their house on an assured short hold tenancy and rent it back.
Mark Steward, director of enforcement and market oversight at the Financial Conduct Authority, said: “This case highlights the importance of protecting consumers even when regulated financial services is only part of your business. The regulations which govern sale and rent-back are designed to protect customers in financial difficulty and to guard them from unsuitable deals. The extensive redress package which we have asked Quick Purchase to implement will address the detriment Quick Purchase’s customers have suffered.”
